Collision Coverage
What Is Collision Coverage?
Collision coverage is a type of auto insurance that helps pay for repairs or replacement of your vehicle if it is damaged in a collision with another vehicle or object. This coverage applies regardless of who caused the accident.
Collision coverage is typically optional but may be required if your vehicle is financed or leased.
Why It Matters
Car accidents can result in costly vehicle repairs. Collision coverage helps protect drivers from having to pay the full cost of repairing or replacing their vehicle after an accident.
Without collision coverage, drivers may have to pay repair costs out of pocket.
How Collision Coverage Works
When a covered accident occurs, the insurance company helps pay for the repair or replacement of the insured vehicle.
Key features include:
- coverage for collisions with other vehicles
- coverage for collisions with objects such as trees, poles, or guardrails
- a deductible that the policyholder must pay before insurance covers the remaining cost
The insurer typically pays the repair cost up to the vehicle’s actual cash value.
Example
If a driver accidentally hits a guardrail and damages their car, collision coverage can help pay for the repair after the deductible is paid.
Collision Coverage vs Comprehensive Coverage
- Collision coverage pays for damage caused by vehicle collisions.
- Comprehensive coverage covers damage from non-collision events such as theft, fire, or natural disasters.
FAQs About Collision Coverage
Is collision coverage required by law?
No, but lenders often require it for financed vehicles.
Does collision coverage pay if I cause an accident?
Yes. It covers damage to your vehicle regardless of fault.
Does collision coverage cover other vehicles?
No. It only covers damage to your own vehicle.
Related Terms
